City worries about industry-housing mix; also at issue is Blazer owner Paul Allen's desire to buy
New master plans from the Port of Portland and the Portland Trail Blazers raise the possibility of removing at least one of the grain terminals now occupying a prime piece of property on the east bank of the Willamette River.
The port's upcoming marine terminals master plan suggests consolidating the city's four grain terminals into three and building a new $100 million terminal at Terminal 4. That would clear the way for Blazer owner Paul Allen to build a restaurant or offices in place of one terminal Ñ O DockÑ that borders his Rose Garden at the east end of the Steel Bridge.
However, no one should expect a wrecking ball on the Willamette River shore anytime soon.
Although port officials say they've heard that Allen representatives have talked about buying the grain-elevator complex, the general manager of CLD Pacific Grain LLC says that's not the case. Even if long-range talks were happening, Arnie Schaufler says, that's not something he would discuss with a newspaper reporter.
A source says the Blazers offered $5 million in 2001 Ñ a value set by a private appraiser Ñ to buy the elevators nearest Allen's property in 2001. But CLD, then doing business as Louis Dreyfus Group, wanted at least $20 million.
J.E. Isaac, the Blazers' senior vice president of business affairs, asserts that any negotiations are news to him. He said there have not been talks for some time.
Blazer management has tried since the Rose Garden opened in 1995 to buy O Dock or begin a joint venture project with CLD. The idea Ñ which will be part of its upcoming master plan Ñ is to develop space for office, retail or restaurant use on the riverbank.
CLD is a joint partnership of Cargill Inc. and Louis Dreyfus Group, which owns and operates both O Dock and the Irving grain elevator at the east end of the Broadway Bridge.
Much depends on team owner
The city has mixed ideas about the grain elevators and their future use to the community. They have been identified as sites for residential use. However, they also are the closest pieces of working waterfront to downtown Portland, and the city's Riverfront Renaissance plan emphasizes maintaining and enhancing the city's 'prosperous working harbor.'
'The industrial usage of the property severely impacts what kind of use we can make to our adjacent property,' Isaac says. 'It would be fairly significant to the overall growth of the area. The waterfront parcel is a key piece of the puzzle.'
The Blazers will present their master plan to the city at the end of the month, proposing new uses for the former Red Lion property and the city-owned Memorial Coliseum, which is managed by the Blazers. Mayor Vera Katz has insisted that the coliseum not be torn down.
The question remains whether Allen would shell out an estimated $20 million for the grain terminal and another $20 million to redevelop the Rose Quarter. The Blazers are expected to lose at least $100 million this season, and Allen has experienced billion-dollar losses in his technology investments, according to news reports.
Isaac says Allen is being kept posted on the master plan.
'Paul is not into spending money these days,' an insider says. 'I don't think he's prepared to take $15 or $20 million and redevelop the waterfront.'
Grain marketers play role
The port's marine terminals master plan says Terminal 4 is where an expanded bulk grain facility could be built Ñ but probably not in the next decade. CLD leases the Port of Portland's grain facility at Terminal 4, just north of the St. Johns Bridge.
'We're not speculating when, but rather if,' says port spokesman Aaron Ellis.
Construction of a new grain terminal on the Columbia River system would be prompted by future land-use decisions in Portland and in Seattle, says Tim Van Wormer, senior marine planner for the port. Both cities, he says, share similar situations: older terminals in urban areas on small parcels of land that don't have optimum rail service.
'I can't speak for what the port's long-term plans are,' CLD's Schaufler says. 'As for building another grain (terminal), there's too much capacity at this point; we've got more grain elevators than we need.'
Ellis estimates that a new high-speed grain terminal Ñ complete with a rail loop for fast unloading of grain trains Ñ might cost $100 million. 'You don't build a new one unless you're going to really anticipate putting a lot of volume through it.'
The grain terminal operator, not the port, would bear the cost of construction. The port's Van Wormer says: 'We would love to work with somebody to build a new, modern, high-capacity, efficient grain terminal in the Portland harbor. But we don't see that there's an opportunity to do that in the near term.'
Portland, the largest wheat exporting port in the United States, has a total of four grain terminals. Besides CLD, Columbia Grain Inc., owned by Marubeni Corp. of Japan, has grain facilities at Terminal 5 that were built in 1977 on land leased from the port.
The Irving elevator, which was built in 1955 and remodeled in 1977, and the O Dock, built in 1912 and updated in 1962, both handle a steady stream of barges and trains Ñ unloading wheat from the Columbia-Snake river system Ñ and ships that are taking on wheat for export overseas.
River traffic is a draw
The grain terminals bring ships to the edge of downtown and add liveliness to the urban scene. When he leads tours of the port as part of the marine terminals planning process, Van Wormer says, the grain elevators elicit considerable comment. 'It reminds everybody in Portland why we have a city of this size, because of the port,' he says.
That's notable, he says, because unlike Seattle, where port activities are front and center to the city, most of the shipping business in Portland takes place away from downtown.
Many people enjoy watching the ships, Ellis says, 'because it's something that puts the 'port' in Portland.'
But in both Portland and Seattle, there are land-use pressures on grain elevators in urban areas Ñ 'to be blunt about it, by the cities,' Van Wormer says.
The Port of Vancouver (Wash.) has one grain terminal, and the Port of Kalama has two.
The port's marine terminal master plan will be reviewed at a public open house on Thursday at the Port of Portland offices. The plan is due to be adopted at the port's board of commissioners meeting in May.